Japanese government to cut mark-up on wheat imports by 45%

TOKYO, Dec. 7 — Japan will slash its current mark-up prices on imported wheat, a move to lower the cost of imported wheat for Japanese millers, informed sources have said.

It will help Japanese millers to compete with European-made wheat products such as biscuits, cookies and pastas.

The government decided to cut its current 17 yen a kilogram mark-up on imported wheat for biscuits and cookies, by 45 percent. It will also reduce the mark-up for pastas all the way down to 1 or 2 yen per kilogram.

The timing of the decision coincides with a trade agreement between Japan and the EU, finalized on Dec. 8.

Over a period of years, Tokyo will phase out the existing tariffs of processed wheat products from the EU, including biscuits and cookies, as well as the current tariffs on spaghetti and macaroni.

Japan currently imports wheat via a state-administered tariff rate quota (TRQ).

While wheat is imported at a zero tariff, the agriculture ministry assesses a mark-up of 17 yen per kilogram, which is charged to a buyer or a flour miller of state-purchased wheat.

The agriculture ministry controls both producer and resale prices of domestic wheat, as well as the resale price of imported wheat. The ministry buys imported wheat at international prices and sells it to domestic flour millers at a markup.

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